Posted by Tom C.
It has been a light week posting as I took yesterday off.
People often ask what setups I trade on a 5-minute chart. The answer is simple - the same ones I trade on a 10-minute chart.
Here is KMX from today. The setup is the same as I referenced a few weeks ago (my "bread and butter" setup).
1.) Gap up.
2.) Price breaks the opening range high (ORH).
3.) Price pulls back to the ORH with support from a rising moving average.
4.) Price rallies to the Fibonacci extension (FE).
KMX was not perfect, as I prefer setups that do not penetrate the ORH or the 8EMA. But it was compelling because it formed "offsetting bars" and closed below those levels but immediately reversed to close back above them. Note that I used the 1st bar high as the ORH because the 2nd bar was a narrow-range, inside bar that signaled a pause after the initial wide-range 1st bar. It would not have made sense to use the third or any other bar as the ORH. I sold at the FE.
Trading 27-April-2016 (+ $66)
22 hours ago